The booming Canadian real estate market poses both opportunities and challenges for businesses all over the province of Ontario. If you are a company looking to acquire commercial financing in Toronto, Barrie, Kitchener, Ajax and other, the benefits and the costs of getting or developing properties must be weighed. Having an in-depth understanding of each area’s individual market is key to making successful business investments.
It might be a hard time for real estate investors to keep track of all different markets, the same way as for business owners to stay up to date and focus on their actual business instead properties they invest in.
So how do you stay informed and make the right property investment choices in an ever-changing financial climate?
If you are looking to get a property for investment, you should ask a qualified commercial mortgage broker for insight to guide you and your decision.
Looking to someone who has invested in commercial properties before will give you the edge you need to advance your operations.
Different Types of Commercial Properties
Commercial mortgages are property financing procedures taken on properties that are business related with goals to generate income. These properties can include revenue generating organizations and departments of a company’s operations.
Types of financing and terms vary, depending on the type of facility that is being developed or acquired. Costs for property mortgage also vary significantly depending on whether the mortgage is a construction mortgage or a traditional mortgage. Originally, Interest rates for mortgages will typically be lower than for construction mortgages since there is no default or delay. There are also no other risks, connected with a property that is already developed. However, during the construction process, interest only payments may be accepted on construction mortgages.
Approval Criteria for Commercial Mortgages
To begin the process of acquiring commercial financing, a business will need to ensure they meet a list of criteria for approval (such as credit score, cash flow, business type), since lenders are considering to hand out larger sums of money.
These criteria include:
- Sufficient Cash Flows: Companies need to prove if they currently generate enough money in terms to afford the debt they are asking for. They also have be able to demonstrate how the facility will generate cash and what the property’s utility will be. This is typically analyzed using the company’s Net Operating Income divided by its Total Debt Service, which includes all principal repayments and interest owed in that specific year.
- Credit Score: This demonstrates the company’s ability to pay its past debts on right time based on past and current debt management.
- Stability of the Business: Lenders will need to see that the business is currently operating successfully and sustainably.
- Business Type: Lenders may specialize in or outright reject lending to different kinds of businesses or those operating in different industries. This varies from lender to lender and is based on the risks involved with various company types.
- Down Payment: Due to the risk of commercial mortgages, the down payment required on commercial properties will be higher than on residential properties, typically ranging from 20%-40%.
Due to contrast in the different types of terms, fees, and rates for several property and mortgages, it is recommended to seek advice from a qualified commercial mortgage broker for right commercial property investment.
Ontario Real Estate Markets
As interest rates begin to rise and average property valuations continue to grow, businesses are poised with opportunities and challenges as they try to navigate the commercial real estate market. If interest rates continue to increase, this will slowly bring down real estate valuations as property financing will become more expensive. While valuations grow in populated GTA areas and other hot markets across Ontario, there are opportunities to acquire property in smaller markets that are often overlooked by typical commercial real estate buyers. Accordingly to Yahoo.Finance, some regions had some decline in property value. However, reports are showing that trend is over and growth is returning. Experts expect significant grows for areas such as Hamilton, Niagara, Kingston, Barrie, Vaughan, and Richmond Hill.
In a market that is always changing, you need someone who can help finding you the best rate in right time. Knowing where to look can help you land valuable properties to invest in or develop that many others miss. Gerard Buckley’s well experienced at real estate investments and capital raising. What makes him suited candidate to assist you with financing process
Financial Market and Commercial Financing Expertise
Commercial financing needs and decisions differ greatly from business to business. Finding a commercial mortgage broker who understands your company’s unique situation will help you make the best possible choice. Gerard Buckley has a wealth of experience in financial markets across the province by knowing interest rate trends. Gerard will generate for you the best mortgage rates and financing terms accordingly to your business. Starting from rental home builds and ending at manufacturing facility purchases.
Gerard will generate for you the best mortgage rates and financing terms accordingly to your business
Gerard Buckley is a Licensed Mortgage Agent with over 40 years of investment and commercial banking experience who has both large and medium sized clients, and would be pleased to assist you as you consider your commercial financing options.
Please Call Gerard at 866-496-4028 for a complimentary consultation.